The transaction, valued at $326.4m, was announced back in December last year, but the deal could be worth more than US$6bn if all optional 232 Challenger 3500 jets are delivered over time. Deliveries for aircraft included in the firm order are set to begin in the second half of 2025.

“The Challenger 3500 jet continues to impress with its ultimate combination of refined cabin experience, proven reliability and top performance, perfectly aligning with the needs of NetJets’ discerning client base,” said Éric Martel, president and CEO, Bombardier. “We couldn’t be prouder to see the Challenger 3500 business jet join the NetJets’ fleet as we write the next chapter of our long-term collaboration.”

The Challenger aircraft family is well known for its reliability and safety with more than 900 business jets of the Challenger 300 series in service worldwide. The 3500 builds on that track record and boasts a dispatch reliability of more than 99.8%. It also offers a range of 3,400nm and “outstanding” runway performance and steep-approach capabilities.

It is also the first business jet in the super midsize segment to have an Environmental Product Declaration published, documenting the aircraft’s environmental footprint over its lifecycle.

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Further revenue breakdown showed contribution of $795m from manufacturing segment, down 22%YoY from $1bn. Bombardier delivered 12 medium and eight large aircraft during the period under review compared to eight and 14 in the same quarter last year.

On the other hand, the company’s first quarter services revenue grew 13%YoY from to $477m from $424m last year.

Despite lower revenue from manufacturing segment, Bombardier’s orders remained strong across the aircraft portfolio, recording a 60% increase to a unit book-to-bill of 1.6. The backlog also increased by $700m to $14.9bn.

“Our team came flying out of the gates in 2024 on soaring aircraft orders and service revenues. The unit book-to-bill of 1.6 and $700m backlog increase are even more meaningful when you take stock of solid activity across traditional customers, fleets and new opportunities materialising for Bombardier Defense,” said Éric Martel, president and CEO, Bombardier.

Lower revenues translated into diluted earnings per share of $1.02 compared to $3.1 in same period last year despite higher adjusted EBIDTA margin of 16% (from 14.6% last year).

The company said that it is making progress on debt reduction with a $100m debt redemption announced on March 14th and closed on April 15th, 2024, using cash from its balance sheet.

Earlier this month, Bombardier announced the successful closing of a new issuance of $750m aggregate principal of Senior Notes due 2031, with a rate of 7.25% per annum and were sold at 99.75% of par. The company plans to use these funds to repay existing outstanding debt.

Bombardier is targeting 150-155 business jet deliveries while growing revenue by $400-600m to $8.6bn from 2023’s $8bn in 2024.

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Revenue from the company’s manufacturing segment rose to $6.3bn in 2023 against $5.3bn in 2022 as it delivered 138 business aircraft in 2023, of which 63 were medium and 75 were large aircrafts. In comparison, Bombardier’s 2022 deliveries stood at 123 (50 medium and 70 large jets).

On the other hand, the company’s aftermarket services revenues grew by $240m to $1.7bn. The growth in aftermarket revenues came following the expansion of its customer service network, including the ramping up and operationalisation of its global service centers.

“Our global aircraft broke many speed records in 2023, but those were not the only records we set last year. Our team came together to deliver the highest revenues and earnings, record aftermarket revenue, and the highest deliveries since we refocused our business in 2021,” said Éric Martel, president and CEO, Bombardier.

The strong topline performance translated into 412% growth in adjusted earnings-per-share at $3.94 from $0.77 year-over-year. The company reported net income from continuing operations and adjusted net income at $490m and $416m respectively.

However, the company’s order backlog decreased from $14.8 in 2022 to $14.2bn at the end of 2023 as the company said it continues to monitor backlog length and production rates to balance with sales activities, market demand and aircraft lead time.

Moreover, cash flows from operating activities for the full year clocked in at $623m with free cash flow of $257m. The company also paid down $0.4bn of debt in 2023.

The company reported a full-year book-to-bill ratio of 1.

Bombardier also announced its 2024 outlook where in it said it is targeting 150-155 business jet deliveries while growing revenue by $400-600m to $8.6bn from 2023’s $8bn.

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“We have seen no reason to change guidance and are confident that we will meet the deadline we announced before” said Éric Martel, CEO and president, Bombardier speaking at an NBAA BACE 2023 press conference. The aircraft has already had 100 hours of flight testing and more than 1000 hours on the ground.

“Its nice that with the Global 8000 I don’t have much to say, it likes flying and being tested and everything is going well,” Stephen McCullough, SVP, engineering and product development, Bombardier.

Bombardier delivered the 150th Global 7500 in September.  The Global 7500 entered service in December 2018.

“Our team is truly proud of and excited about the success of the Global 7500 aircraft program reaching its 150^th-built aircraft,” said Martel. “The Global 7500 aircraft is the largest ultra-long-range business aircraft in the skies and its continued success is a testament to the efforts of our incredibly talented teams that build these amazing aircraft. Our continued success is absolutely related to their unrivalled dedication and commitment to excellence in everything they do.”

Bombardier says the Global 7000 has a fleet dispatch reliability of more than 99.8%. In the last month Bombardier has set 20 speed records with the aircraft.

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The manufacturer delivered 29 aircraft during Q2, one more than the same quarter last year. And full-year deliveries are on course to match the guidance of over 138 deliveries, it confirmed.

The Q2 performance of Bombardier’s aftermarket business was described as “stellar”. Revenues in this segment rose 19% to total $428m compared with the same period of last year. Its backlog rose to $14.9bn – a rise of $0.1bn since the end of the previous quarter. This was supported by a 1.1x unit book-to-bill. Reported net income and adjusted net income reached $10m and $80m respectively.

The company posted a net loss for the quarter of $35m compared with a loss of $129m in Q2 2022.

Éric Martel, president and CEO, Bombardier praised the results achieved against a background of continuing supply chain challenges. “Our team successfully navigated a highly dynamic business environment that saw sustained demand for new and pre-owned jets, as well as steady service growth, all while supply chain pressure persisted,” he said.

“Thanks to our team’s tremendous work, we boosted our revenues this quarter by 8% year-over-year, driven in part by an exceptional 19% year-over-year aftermarket revenue increase,” Martel added. Read Bombardier’s full Q2 results here.

Meanwhile, Bombardier confirmed in April that its strategy to achieve aftermarket revenues of $2bn by 2025 was on track, having increased its aftermarket revenues by more than 50% since 2020. In Q1 results the manufacturer posted revenue up 17% to $1.5bn, rising from $1.2bn in Q1 2022. (Pictured is a Bombardier Global 7500).

Bombardier Q2 92023 results – at a glance

• Revenues rises to $1.7bn, up 8% year-over-year
• 29 deliveries and 19% year-over-year
• Aftermarket revenue rises to $428m
• Adjusted EBITDA rises by 37% to $275m
• Reported EBIT was $245m
• Reported net income and adjusted net income reach $10m and $80m respectively
• Backlog of $14.9bn, reflecting expected demand profile at a unit book-to-bill of 1.1 times.

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Through the agreement, Kansas City-based Airshare plans to double the size of its Challenger fleet to support demand for its fractional programme. The firm entered the super-midsize segment with its first order for 20 Challengers in May 2021.

“The response we have received to the Challenger entering our fractional program has been tremendous, from both new and existing customers,” said John Owen, president and CEO of Airshare. “We are thrilled to extend our commitment with Bombardier and look forward to adding several more Challenger 3500s to our fleet. The strength of our partnership made it easy for us to accelerate our plans to order more of these aircraft to meet customer demand.”

The Challenger 3500 aircraft is the first business jet in the super mid-size segment to have an Environmental Product Declaration published, documenting the aircraft’s environmental footprint over its lifecycle.

Eric Martel, president and CEO, Bombardier said: “The entire team is immensely proud that Airshare continues to trust Bombardier to grow its fleet. Airshare and Bombardier share several values in common: we strive for excellence and work tirelessly to offer an exceptional experience to our clients. With this new order, our valued relationship continues to grow stronger, as the award-winning Challenger 3500 aircraft keeps elevating Airshare’s flight experience with its ultimate combination of performance and comfort.”

Airshare’s fractional programme gives each owner a 1/16th share with 20 days and unlimited flight time. The firm also offers its own jet card program, Embark, as well as aircraft management, on-demand charter and maintenance services.

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The General Aviation Manufacturers Association (GAMA) says that business jet manufacturers delivered 712 jets in 2021 aircraft compared with: 710 in 2021, 644 in 2020, and 809 in 2019. 

Manufacturers are looking to speed up production this year, but they are doing it gradually. Gulfstream delivered 120 aircraft in 2022, up one from 2021. It plans to increase production by 20% and build around 145 jets in 2023. (Gulfstream delivered 147 in 2019).

“It’s really important to remember that our 2023 and 2024 estimates about production levels and delivery levels are independent of current demand,” said Phebe Novakovic, CEO of Gulfstream’s parent General Dynamics speaking at investment bank Cowen’s Aerospace and Industrial Conference this week. “They are based entirely and solely on our strong durable backlog. So even if there was a macroeconomic permutation, the next few years are solid for us.”

The Savannah manufacturer is – perhaps conservatively – expecting to sell about one jet for each one it delivers this year. If this happens, it will still have a decent backlog in 2025. (It had a book-to-build of 1.47 in 2021.)       

Bombardier delivered 123 aircraft in 2022 (some 49 of these in the last quarter). It is also not looking to speed up production rapidly. The Canadian manufacturer is planning to deliver at least 138 aircraft this year – a 12% rise. “As we see the market stabilising, we are not going to over-tweak our rates. We are going to stick to the plan and ensure our production remains de-risked. I talked last quarter about reaching a book-to-bill cruising altitude of one. That’s where we are at today,” said Éric Martel, president and CEO, Bombardier, on an analyst call this month. “The demand itself is stable to the level of full year production and further padded by our healthy backlog.”

Intriguingly, Martel said that Bombardier could produce 200 aircraft a year without increasing its facilities. But do not expect this to happen in the next few years.

In 2013, equity analysts at Citi dubbed the years after the Global Financial Crisis as “the lost decade” for business aviation. They argued that too many aircraft deliveries in the run up to 2008 had created an overhang, preventing new orders. This is not happening now.

We are now four years into the “Prudence decade.” Where manufacturers have put prudence and future profits ahead of short-term wins. A new cohort of customers has discovered the benefits of business aviation through charter, jet cards or fractional shares, but are having to wait before they can own a whole new aircraft.

Being prudent may not be as much fun as going crazy, but it is worth it if it stops the industry from being lost for another 10 years.

This is from Corporate Jet Investor’s One Minute Week email – you can sign up for free here

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The Canadian OEM said the “healthy backlog” alongside its 1.4 full-year book-to-bill ratio reflect “continued favourable medium and long-term” market conditions.

Its revenue increased 14% year-over-year (YoY) to $6.9bn in full-year results for 2022 and is projecting  revenue of $7.6bn this year.

It delivered 123 jets in 2022, 45 of which were delivered in the fourth quarter (Q4) and is expecting to deliver a further 138 this year.  

Bombardier attributed its revenue growth to “higher deliveries, a favourable aircraft mix” and its aftermarket services. These  reached a new full-year revenue peak of $1.5bn, up 22% YoY.

The company also reported $735m in free cash flow, but is expecting it to drop down to a third of this figure ($250m) in the coming year. The firm used cash from the balance sheet and operations to help clear $1.1bn of debt.

In terms of profit, Bombardier’s EBITDA was up 45% from last year to $930m. This was driven by increased Global 7500 earnings, cost structure improvements and higher aftermarket contribution.

The results are “a resoundingly positive culmination of a strong year and a testament to the team’s effort to execute in the fourth quarter”, according to Éric Martel, president and CEO, Bombardier. “We exceeded commitments across the board, be it on deliveries, our growing aftermarket business and profitability,” he said. “This puts us ahead of our plan and gives us the flexibility to be even more proactive and opportunistic going forward.”

Bombardier results – at a glance 

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Set to open in 2025, the Abu Dhabi Service Centre, covering nearly 100,000sqft, will be the manufacturer’s first full-service facility in the UAE. Featuring a large hangar, the centre will house a parts depot and suite of maintenance services including scheduled and unscheduled heavy maintenance, aircraft modifications, paint modification, aircraft on ground (AOG) capabilities and aircraft parking services. The facility will be able to accommodate up to four Global 7500 aircraft and service the new Global 8000, after its commissioning in 2025.

Éric Martel, president and CEO, Bombardier said the Middle East is an important market for the manufacturer, with more than 150 aircraft. “Abu Dhabi is a dynamic financial hub for business and commerce in the UAE, and this service facility will provide significant benefits, quick aircraft turnarounds, and OEM peace of mind to our growing customer base,” he said. The new service facility is expected to lead to 100 extra jobs.

Jamal Salem Al Dhaheri, MD and CEO, Abu Dhabi Airports welcomed the new investment. “Located at Abu Dhabi International Airport, one of the fastest growing airports in the world, we have no doubt that Bombardier’s global aviation leadership, experience, and expertise will be a catalyst for invaluable service delivery and excellence, upon the facility’s official unveiling,” he said.

Matthew Nicholls, senior advisor, Communications and Public Affairs, told Corporate Jet Investor: “Bombardier has had a presence in the Middle East for many years. But the addition of this new, dynamic facility will help us better serve our growing customer base in the region and provide them with new and essential services.”

 Bombardier remains a market leader in the Middle East, he added. “This region represents considerable growth opportunities for us, both in terms of aircraft sales as well as aftermarket development.” 

The latest investment follows Bombardier’s recent service centre expansion and improvement projects in Singapore; Miami, Florida; Melbourne, Australia; and London, UK. Together, the expansion totals nearly an additional 1m sqft of new service capacity to its worldwide aftermarket network.

Speaking at the inauguration of the manufacturer’s new Biggin Hill facility, Jean-Christophe Gallagher, executive vice president, Services and Support and Corporate Strategy, Bombardier told Corporate Jet Investor last week: “We have been very clear for the Bombardier fleet, we are looking at a 50% share of a $4bn market. There is plenty of room for everyone else.” 

Pictured are Bombardier executives and airport officials at the ground-breaking ceremony. From left: Steven Polmans, vice president, Business Development & Free Zones, AD Airports, Francois Bourienne, chief commercial officer, AD Airports, Jamal Salem AL Dhaheri, MD and CEO, AD Airports, Éric Martel, president and CEO, Bombardier, Jean-Christophe Gallagher, executive vice president, Services and Supportand Corporate Strategy, Bombardier, Zeshan Malik, senior director, Corporate Development, Bombardier and Christopher Debergh, vice president, OEM Parts and Services, Bombardier

Meanwhile, read more about the official inauguration of Bombardier’s Biggin Hill Service Centre, UK here. If you enjoyed reading this story, please register for our free weekly One Minute Week newsletter, packed with a wealth of news and views about business aviation, here.

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The firm, which offers fractional aircraft ownership, private jet leases, and jet card programmes, will eventually operate a fleet of 24 Global 8000s, which includes the new order, as well as eight conversions of Bombardier aircraft previously ordered. The remaining 12 jets will be delivered when NetJets upgrades its existing Global 7500 fleet progressively in the coming years.

Patrick Gallagher, president of Sales, Marketing and Service, NetJets said the aircraft will offer its customers “the pinnacle in unforgettably personalised experiences aboard the finest ultra-long-range aircraft available”.

He added that by the end of 2023, NetJets’ worldwide fleet will be 30% larger than it was at the beginning of this year.

Éric Martel, president and CEO, Bombardier said: “NetJets’ experience and expertise make them the ideal partner to unlock the full potential of this revolutionary Mach 0.94 business jet in a large fleet context. Our valued relationship continues to grow stronger, and we are proud to share this historic milestone together.”

The delivery of the aircraft will allow NetJets’ clients to access a wide variety of destinations “faster and farther than ever before”, according to Bombardier. The routes that NetJets clients can travel will expand to include Dubai to Houston, Singapore to Los Angeles and London to Perth, Australia.

The Global 8000 was launched at EBACE in May this year. It has an 8000nm range and has the same landing capabilities as the Global 7500 so it can fly into more difficult airports such as London City.

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